Private lending, hard money lending, License requirement in NJ

[Raj G.]

Hi,

if I want to lend money to my friends who are investors/flippers. do I need license in NJ?

What is difference between private lending and Hard lending?

is there any terms and conditions like up to this amount no license need, or up to these number of loans no license need etc.

Thanks

[Doug Smith]

Different states interpret Federal Law differently and have their own state laws. Here's a link to the NJ licensing page on the NMLS website. It should be able to provide you with answers to your questions: https://mortgage.nationwidelicensingsystem.org/slr/Pages/Dyn...

Regarding the difference between Private Lending and Hard Money lending, Private simply means it's coming from an individual or small group. Hard Money means the loan is primarily based on the collateral without much regard for other factors. Regardless of what you do, I would be sure to 1) only make loans to entities (LLCs, S-Corps), 2) make sure you're only lending on properties that are used for investment/business purposes (no owner-occupied or 2nd homes), and 3) make sure your documents are in order...get an attorney to at least draft the boiler plate. 

Good luck to you!